Cities are increasingly a joint enterprise of the rich and the poor. A vision for their future must integrate the needs of both.

HOW DO you transform a city like Mumbai that typifies the worst of all urban problems into a "world class city"? What are the criteria that govern this process? What is the model you choose? What are the systems of governance? How do you work out a realistic plan to find the finance?

These are some of the questions that are under discussion as one more report on dealing with Mumbai's problems does the rounds. Bombay First, an organisation with representatives from Mumbai's corporate world, commissioned McKinsey and Company to prepare a blueprint to transform Mumbai into "a world-class city". After two years of workshops and consultations, the report was presented to the Maharashtra Government last month. The Government responded by appointing a special officer under the Chief Secretary to follow-up on the report.

The McKinsey report is not the first, nor will it be the last attempt to resolve Mumbai's apparently intractable problems. The report itself has set out a 10-year plan that is estimated to cost Rs.200,000 crores, of which one fourth would be public investment, principally on transport and housing. The report focusses on six key areas  economic growth, transportation, housing, other infrastructure, financing and governance. Each area is crucial and also linked with every other area.

The ideas set out in the report emphasise the fundamental challenges that confront any attempt to improve or transform cities like Mumbai. The first challenge is to arrive at a vision that is acceptable and achievable. Should Mumbai strive to become another Shanghai or a Singapore? Is it possible or even desirable?

Currently, Mumbai is a divided city  a city of the rich and the poor who live parallel yet inter-dependent lives. It is a city that has edged away from manufacturing, which defined its central character, towards services without dealing with the messy leftovers of the move from one to the other. It is a city that projects and protects its cosmopolitan physical heritage while at the same time falling in with political demands by parties like the Shiv Sena, which emphasise its location within Maharashtra. A vision of a city caught between so many contenders  the industrialist and the worker, the son of the soil and the world citizen, the elite and the poor  all claiming its citizenship must necessarily integrate their needs.

Two crucial areas in terms of transforming the city are transport and housing. Currently, Mumbai's record on public transport is average while on housing it is poor. This is evident from the fact that more than half the population lives in slums. The image of Mumbai as India's financial capital has gradually been replaced by its reality as India's slum capital  Slum-bay. This image of deterioration and physical decline has also contributed, to some extent, to the decline in its growth rate, something that worries the corporate world. In the last three or four years, Mumbai's GDP growth rate has declined to 2.4 per cent per annum. The cost of doing business in Mumbai is just too high because of extortionist land prices and a deteriorating and over-stretched infrastructure.

Yet, whatever the scheme or combination of schemes initiated to improve Mumbai, there needs to be a new approach in the way the city is governed. Who decides for Mumbai? McKinsey suggests a corporate pattern of governance with a CEO and a centralised decision-making structure. It envisages that the Chief Minister as CEO will appoint specific officers who will be given the power and autonomy to implement plans. But how is this possible? Currently, the city is divided between the desires of the State Government and the Municipal Corporation. Each has different politics and compulsions. Most often these are in conflict. Thus, solutions for the city's problems have been piecemeal. One government pushes ahead with one aspect of transport, while another deals partially with housing. Neither tackles the long-term and far more difficult problems of infrastructure for the city, particularly water supply and sanitation. Apart from the State Government and the Municipal Corporation, there is a multiplicity of authorities in the form of other autonomous bodies such as the Mumbai Metropolitan Region Development Authority (MMRDA).

Corporate governance revolves around boards that are accountable to shareholders. Their executives do not have permanent tenure. They are judged by their performance. In the Government, we have a permanent structure of the bureaucracy where performance does not count and an impermanent structure of politicians where consistency does not count. As a result, anything like a long-term plan for a city like Mumbai is virtually a pipedream as the men and women who are asked to make the decisions worry about the next election and the men and women assigned the task of implementing any plan await the will of their impermanent and changing political bosses. There is simply no way to transform this system of governance into one that resembles that used in the corporate world.

Another question is that of raising the finances to implement improvement schemes. Multilateral agencies like the World Bank will be approached as they have been in the past. But the Bank has only just concluded negotiations for the $542 million Mumbai Urban Transport Project II (MUTP II) after a process that took an incredible 14 years. Over this period, the State Government, the Railways and the Municipal Corporation had to agree to institutional reform to ensure what the Bank sees as "sustainability" of the project. One of the prerequisites was the creation of an autonomous corporation, the Mumbai Rail Vikas Corporation (MRVC) that would straddle Western and Central Railways and take care of the railway component of the MUTP.

Another criterion for the MUTP was addressing the issue of poverty. Thus, the resettlement and rehabilitation of the 20,000 or so families that lived along the railway tracks and on land belonging to the Railways had to be negotiated. The Bank made their resettlement a precondition to the project. The three entities, the Railways, the State Government and the Municipal Corporation had to reach a consensus on how this would be done. Only after this was agreed to did the Bank clear the project. In fact, the model that this has created is one that can be replicated in other infrastructure projects as inevitably when a new road has to be built, a railway line expanded or water and sewerage pipes laid, people and their habitats are directly affected. Given this long and complicated process of negotiation for the MUTP, funding will be neither instant nor easy.

Then there is the question of land availability. Land is at a premium in Greater Mumbai. There is land in the hinterland but it can only be useful if it is made accessible through an efficient transport network. The solutions that have been offered include an enhanced FSI (floor space index) that would permit high-density vertical construction and opening up of environmentally sensitive areas such as the saltpans. In fact, the report recommends the creation of Special Housing Zones on saltpan lands with 300,000 low-income houses to be available on rents of between Rs.750 and Rs.1,000 a month. This could be a recipe for disaster in a city that is struggling to preserve its few open spaces and common lands. In any case, these lands fall within the Coastal Regulation Zones and would require special clearance from the Centre before they can be developed.

The McKinsey report does carry some useful suggestions. For instance, it suggests the creation of a single transportation agency that combines the roads department of the Municipal Corporation, the MRVC, the Mumbai-related transport functions of the Public Works Department of the State Government, the Mumbai Metropolitan Region Development Authority and the Maharashtra State Road Development Corporation. Taking off from the model of the MRVC, which will facilitate the expansion of the commuter railway lines in Mumbai, such a step would help. Similarly, some of the suggestions on raising additional revenues so that the funding of the needs of the city is not dependent on external borrowings or donors are also worth examining.

There is no question that something fairly drastic has to be done to deal with the urban crisis in cities like Mumbai. But it is essential to have a vision that encompasses the realities of these cities, how they have grown and who lives in them. Cities are increasingly a joint enterprise of the rich and the poor. A vision for their future must integrate the needs of both  being "world class" should not mean catering only to one class by creating a few islands of comfort for the rich while neglecting the rest of the city.